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Collision vs. Comprehensive Coverage: What’s the Difference?

Michelle Snider
March 06, 2019

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Collision and comprehensive coverages provide financial safety nets in the event that your vehicle is physically damaged and needs to be repaired or replaced. Although these coverages are generally not required by state laws, they can reduce your financial hardship during a loss.

Also, if you are financing a loan for a car, your lender will most likely require both collision and comprehensive coverage as part of your car insurance policy.

Collision Coverage

Collision coverage pays for the cost to repair damages to a vehicle due to an accident, either with another vehicle or an object. Typically, you will collect only the actual cash value of your car versus the replacement cost value. Gap insurance protects you in the event you owe more than your vehicle is worth.

  • Collision coverage is generally the most expensive portion of a car insurance policy.
  • Premiums are based on a number of factors, including your deductible, driving record and the type of car you drive. If your driving record is fairly clean (no or very few tickets or accidents), your premiums will be lower because you are less likely to have a collision.

Comprehensive Coverage

Comprehensive coverage pays for damage to your vehicle that is caused by theft, vandalism, fire, natural disasters or hitting an animal.

  • Comprehensive coverage comes with a deductible and the insurer will only pay as much as the vehicle is worth at the time of the incident.
    • To calculate how much your car is worth, look up the Kelley Blue Book value or the National Automobile Dealers Association’s Official Used Car Guide value. If your car is low in value, the yearly premiums for comprehensive coverage may not be a sound investment.
  • Comprehensive coverage has many limitations, so it’s best to review your policy carefully to make sure you are properly covered.

Top Ways to Save on your Auto Premium

  • Consider raising your deductible.
  • Keep up your good driving record.
  • Drive less to qualify for a low-mileage discount.
  • Drive a car with safety features such as anti-lock brakes, airbags, etc.
  • Install an anti-theft device.
  • Ask about our multi-policy discounts.

We’re Here to Help

What to do before purchasing a vehicle? Test drive the automobile insurance rate by contacting us at (219) 879-4581. We would be happy to provide you all the information that you need to help you make your best buying and coverage decision.

This article was adapted from Zywave. The information provided is not intended to be exhaustive, nor should it be construed as advice regarding coverage. Readers should contact an insurance professional for appropriate advice concerning their needs.

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